A recent survey conducted by the National Social Security Fund (NSSF) sheds light on the spending behaviors of savers, revealing a predominant allocation of benefits towards non income generating expenses such as education, residential construction, and land acquisition. This trend, as depicted in the report, raises concerns regarding the fulfillment of a secure standard of living post-retirement, thereby deviating from the core objective of the benefits.
The comprehensive report, designed to gauge the impact of benefits on savers’ lives, was based on a sample of 1,129 individuals drawn from a pool of 72,713 retirees and mid-term access beneficiaries. Among the surveyed group, diverse benefit categories were represented, including mid-term benefits, age benefits, exempted benefits, withdrawal benefits, invalidity benefits, and immigration grants.
Analysis of the findings reveals that only a minority, constituting 11 percent of the beneficiaries, directed their funds towards income-generating ventures such as business enterprises, agricultural pursuits, trading activities, or service-oriented endeavors. Conversely, a substantial 40 percent predominantly channeled their benefits towards non-commercial expenditures.
Patrick Ayota, the Managing Director of NSSF, expressed concern over these statistics, emphasizing the necessity for enhanced educational initiatives aimed at equipping savers with the requisite knowledge to effectively utilize their benefits. While acknowledging existing NSSF programs aimed at addressing this need, Ayota underscored the importance of intensifying and broadening training efforts to encompass a wider segment of the membership.
Moreover, the report highlights a prevailing reluctance among savers to explore financial instruments as investment avenues, particularly concerning income-generating ventures. Ayota emphasized the importance of addressing this trend, emphasizing the potential of financial instruments in providing sustained income with minimal risk.
Another noteworthy revelation from the report is the significant proportion of retirees, particularly those aged between 56 and 60 years, supporting multiple dependents, including those still pursuing education. Furthermore, a staggering 60 percent of retirees engage in secondary employment to supplement their income and support their dependents, indicative of enduring financial responsibilities well into retirement.
In terms of survival strategies, business ventures emerge as a relatively minor option among retirees, with only 18 percent relying on business income for sustenance. This underscores the imperative for a paradigm shift towards embracing entrepreneurship as a viable avenue for financial security during retirement.
